When companies decide to track performance, they invariably begin by measuring results. That’s the wrong approach. Results only tell you what happened, not why. You can choose to measure either the results of your work or the actions that cause the results. KPIs (Key Performance Indicators) should be reserved for tracking things that directly relate to specific actions or activities, not the final result. Revenue, profit and number of customers should not be used as KPIs. They are the result of many activities, so don’t identify particular actions to take.
Sometimes, it’s a matter of perspective. The General Manager for a hockey club is interested in results which are measured in wins.The coach needs to make it happen and does that by doing the little things right. Players may be asked to back check more or block more shots, pass more, shoot more. All of these individual actions can be tracked and measured, and if they improve, a better result is likely to follow. It’s not guaranteed, but it’s better to focus on the activities rather than the end result. Wins are the KRIs (Key Results Indicators) and the actions are tracked with suitable KPIs. If you are meeting your KPIs, the wins will take care of themselves. (More…)